Friday’s Insider: Fertilizer Affordability — It’s All About the Tariffs

I intentionally delayed my March affordability analysis, as it was quite clear that the White House’s announcement of new import tariffs would have some impact on both agricultural commodities and fertilizer prices.

I still believe it’s a bit too early to draw definitive conclusions about the consequences of the newly announced tariffs, even though President Trump has postponed their implementation by three months. Nevertheless, some price impact is already visible, particularly in the US.

To recap, I use recent CBOT values for wheat and corn and compare them with FOB per short tonne prices of DAP and urea in NOLA.

So, let’s begin.

Key Inputs: April 11, 2025 vs. February 2025

Here’s how the numbers compare:

• Corn Price: $4.97 per bushel (up from $4.75 in February)
• Wheat Price: $5.70 per bushel (up from $5.65 in February and from a low of $5.45 on 4 March 2025)
• Urea FOB NOLA: $408 per short tonne (up from $385 in February)
• DAP FOB NOLA: $645 per short tonne (up from $618 in February)

Now, let’s return to our relatively simple affordability calculations and analysis.

Affordability Ratios (2024–2025)

Affordability is calculated as the ratio of crop prices to fertilizer prices, offering a clearer understanding of the cost burden on producers.

Urea Affordability

Corn Producers

Analysis: Affordability for corn producers has declined for the fifth consecutive month, now reaching its lowest level since I began tracking in June 2024.

Wheat Producers

Analysis: After a brief improvement in February, wheat affordability dropped sharply in March and is now at its lowest point since June 2024.

DAP Affordability

Corn Producers

Analysis: Impressively, despite sharp fluctuations in both corn and urea prices, the DAP affordability ratio for corn producers remained unchanged to the fourth decimal place.

Wheat Producers

Analysis: This is now the lowest index since June 2024, when I began tracking affordability.

Comparison to February

1. Urea:
   • Corn producers: Affordability decreased by 1.29% in March 2025
   • Wheat producers: Affordability dropped by 4.83%
2. DAP:
   • Corn producers: Affordability remained unchanged
   • Wheat producers: Affordability fell by 3.30%

Analysis of Trends

The main decrease in affordability was driven by a sharp rise in fertilizer prices: urea increased by 5.97%, and DAP by 4.37%.

I keep asking myself how long this decline in affordability can continue and when the market will reach its resistance point. That said, both corn and wheat prices still appear relatively healthy according to analysts.

We’ve just entered Q2 2025, a period when nitrogen fertilizer demand typically slows in the Northern Hemisphere. It will be interesting to see how things develop over the next 30 days—and whether tariffs will exert further pressure on affordability.

I’m also considering whether the new tariff structure warrants a revision to my affordability methodology.

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About the Author of “Friday’s Insider”: Ilya Motorygin is the co-founder of GG-Trading and brings 30 years of experience to the fertilizer industry. Renowned for his comprehensive problem-solving skills, Ilya expertly manages deals from inception to completion, overseeing aspects such as financing, supply chains, and logistics.